Post Office Savings Scheme: Investing in a good savings plan has always been a priority for the middle class in India, who primarily wants to invest in policies with high interest rates and guaranteed returns. While fixed deposits in banks fulfill that requirement, the rate of interest and tax benefits are not as high as post office savings schemes. Small savings schemes offer higher interest rates than fixed deposits, and can be the best option for you if you want to invest in risk-free policies.
Post Office Savings Schemes, backed by the government, comes with interest rates between 5.5 per cent to 7.6 per cent depending on the scheme you are opting for. On the other hand, fixed deposits usually carry an interest rate of 5 to 6 per cent for a tenure of one to 10 years. Post office schemes also come with tax benefits under Section 80C of the Income Tax Act, 1961, thereby reducing the tax liability.
Best Post Office Schemes with High Interest Rate and Tax Benefits
public provident Fund: PPF Account is a 15-year policy that offers a high interest rate of 7.1 percent and comes with income tax benefits wherein the interest earned is tax-free. The account can also be opened in the name of a minor and a contribution of Rs 500 to 1.5 lakh can be deposited annually in the PPF account.
Sukanya Samriddhi Yojana: To earmark the amount for a girl child, the SSY scheme offers an interest rate of 7.6 per cent. The account can be opened for a girl child below the age of 10 years, and the term of the scheme is 21 years. The investment made and the interest earned under this scheme is tax free under section 80C of the Income Tax Act.
Senior Citizen Savings Scheme: To enable senior citizens to get a fixed income after retirement, the post office has the Senior Citizens Savings Scheme, or SCSS. The interest rate under this scheme is 7.4 percent. The maturity period under this plan is 5 years but can be extended beyond that. The upper limit of this account is Rs 15 lakh and the interest earned is fully taxable. This is for Indians above 60 years of age, with few exceptions.
National Savings Certificate (NSC): This scheme is best suited for those who want to invest for a short tenure of five years and also want to get tax benefits. While the five-year bank FD rate generally comes at 5.5 per cent interest rates, NSC gives a return of 6.8 per cent. This post office savings scheme only requires a lump sum amount and does not require paying monthly contributions.
The government-backed post office savings schemes are aimed at meeting the needs of people who want risk free savings and also want to reduce tax liability.
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